Chinese "Nuts"

Chinese have been opening 115,000 new A-share accounts each day this past few weeks. The big day the market fell last week 130,000 new accounts opened....this compares to January 2006 where the average daily openings were 2,708. Don't believe what the papers tell you...China is a buy!

Notes regarding this current market:

1) The press says the current correction started last week and was triggered by China and the Sub prime lending implosion....not true...most stocks peaked one or two months ago.
2) There is still room for another 5 to 15% plus downside from here...
3) Technology looks like dead money.
4) Many closed end funds are already at material discounts to NAV.
5) Energy companies remember peaked a year ago...and are currently outperforming the broad market.....importantly earnings are expected to be down this year across the board so expectation are literally zero.
6) Interest rates have to rise in Japan.
7) India did get ahead of itself....it could easily trade sideways for a year...
8) Leverage and Debt are the kiss of death...it allows for zero errors and no one bats 1000.

There sure is a whole bunch of debt (globally) that has no idea what its managers are doing with it.....buyer beware! This remains a market that is in the early stages of unwinding a portion of this debt.

Danny Boy seen here remains patient, centered, calm and attentive...many of the attributes Mr. Buffet is looking for in a money manager.